TORONTO, Dec 7 (Reuters) - The Toronto Stock Exchange’s main index was set to rise on Friday after Canadian and U.S. jobs data painted a rosy picture of the North American economy, easing concerns that have dogged equity markets.
The new job reports for both Canada and its biggest trading partner came in higher than expected, easing concern over a possible recession while still pointing to a modest U.S. interest rate cut next week.
Canada’s economy added 42,600 jobs in November -- four-times more than analysts expected, according to Reuters data. For details, see: [nN07330502]
The report comes on the heels of a surprise rate cut earlier this week by the Bank of Canada, and suggests the domestic economy is healthier than previously thought.
“Canadian equities should be doing quite well with the very large job gain here. Any sort of recession scenario in Canada is really receding into the background,” said Carlos Leitao, chief economist at Laurentian Bank Securities in Montreal.
In the United States, employers added 94,000 jobs last month. The figure was slightly higher than expectations and increases the odds of a modest interest rate cut, 25 basis points, by the Federal Reserve next week. For details, see: [nN06211452]
The U.S. data indicates “the U.S. labor market is holding out well, and there is not big spillage from the housing mess into the broader economy,” added Leitao.
TSX momentum is to the upside after a broad afternoon rally on Thursday. The late up-swing was led by resource shares and rising commodity prices, which were relatively flat early on Friday.
In corporate news, retailer Gildan Activewear (GIL.TO) reported a jump in fourth-quarter profit late on Thursday, meeting expectations. For details, see: [nN06257381]
The S&P/TSX composite index .GSPTSE has risen in six of the last eight sessions, advancing nearly 4 percent following a drop of more than 9 percent in November.
The benchmark index starts the day at 13,849.80 after rising 115.26 points, or 0.8 percent, the day before.
$1=$1 Canadian Reporting by Jonathan Spicer